Update -

Free Money Leads to Huge Gains

It’s a great time to be an investor. There is free money all over the place.

It’s a theme I’ve written a lot about in recent months. It’s the core idea behind my Dow 100,000 thesis.

It sounds outrageous, I know… but then we get news like we got today.

Early this morning, I got word that Washington will give $1.6 billion to a tiny company I told my Alpha Money Flow subscribers about in January.

Back then, it was just a tiny $4 stock that was seeing increased money flow… a sign that investors in the know are getting bullish.

It’s gone up a bit since then.

After today’s news, the stock is trading for more than $107.

Folks who took advantage of my research are now sitting on gains of more than 2,000%.

Every $5 put into the stock back then is worth more than $100 now.

That’s what I mean when I say it’s a good time to be an investor.

But it’s also an odd time…

When Fear Leads to Greed

As I’ve said for more than a decade now, the biggest influence on the stock market now is the government. The market’s “invisible hand” has given way to Washington’s fat, sticky fingers.

It’s not good.

As you know, I’m convinced it will turn into big trouble.

But the road from here to there is long… and paved with freshly printed dollar bills.

In fact, my biggest fear for investors right now is that so many of them will continue to do what they’ve done over the last decade. They’ll stay on the sidelines, convinced that the next headline will bring down the markets.

From the depths of the Great Recession to one record after the next, many investors were convinced the bull market would come to a sudden, painful end.

They were right to think that way. Their math added up.

But they forgot about Washington and its boys at the Fed. They’ve been spending, borrowing and printing… fueling one record after the next.

The trend has not slowed. It’s accelerated.

That’s why a $4 stock I touted in January is now worth $100.

And it could be worth $200 soon enough.

Don’t Fight Free Money

I hinted at this trend when I recommended shares of the ProShares Short FTSE China 50 ETF (YXI). Back in January of last year, I said China was in for some tough economic times.

It was time to play the downside of the nation’s economy.

But I warned we couldn’t play the downturn with just one or two stocks. The government could easily manipulate them. “But they can’t manipulate them all,” I wrote as I eyed up the country’s huge monetary imbalance.

I was wrong.

It can, and it did.

The overall thesis was spot-on. China has gone through some immense financial pain… even outside the coronavirus situation. Its Belt and Road Initiative – which I detailed in the January 2018 issue – has proven to be an expensive endeavor with very little return.

But that hasn’t stopped the country from devaluing its currency, pumping massive amounts of money into its economy and putting money before human rights (I’m stunned that nobody seems to care what’s happening in the country).

The news out of China – from an economic and social standpoint – is downright frightening and will not end well. But the same forces that will propel our stock market to new records have kept our short thesis on China from panning out.

After 18 months of the nation’s stock acting as a healthy buoy to our portfolio, we hit our trailing stop after it soared yesterday. We officially exited the position this morning.

It’s proof that the thesis can be 100% spot-on… but the market doesn’t care – especially when the market is stuffed full of funny money.

As I said in a recent video update, we must “go long until we’re wrong.”

With rumors of trillions more in stimulus on the way from Washington, stocks have plenty of room to surge higher.

It’s an odd time to be an investor… but it’s a heck of a good time too.

Be well,

Andy